HMA official: Munroe lease talks ‘on track'

Published: Monday, July 15, 2013 at 8:52 p.m.

Last Modified: Monday, July 15, 2013 at 8:52 p.m.

Health Management Associates Inc. tried to quell any concern among Marion County Hospital District trustees Monday as the two sides work toward closing a $200 million lease deal allowing HMA to operate Munroe Regional Medical Center.

Pete Lawson, HMA executive vice president of development, said during a trustee meeting that an attempt by HMA shareholders to replace the company's board of directors has been well publicized and that "all other discussion is pure speculation."

Instead, Lawson focused on the lease discussions and insisted that those discussions were "on track."

"I think you made a great decision to pick us ... I think you should take comfort in that," Lawson told the trustees. "We're on time and in great shape. We're a Fortune 500 company and one of the strongest in the industry."

The reassurance came at a tumultuous time for HMA. The health care company's largest investor, Glenview Capital Management, is making a bid to oust HMA's current board and replace it with one Glenview said would be more focused on trying to increase the worth of the company and the interests of shareholders.

On a Glenview website, the company accuses HMA of grossly underperforming compared to peer health care companies, repeated failure to meet earnings goals, and growing revenue only by buying hospitals without thought to a logical, long-term growth plan.

New York-based Glenview complained that it had tried to work with HMA's board, but that it was ignored.

Glenview owns nearly 15 percent of HMA's stock.

Before the scheduled Hospital District trustee meeting, Lawson told the Star-Banner that regardless of the HMA board's future, the lease discussions were far enough along that he did not see them being derailed.

HMA has remained mostly quiet about the Glenview move, but Lawson said that HMA would likely soon become more vocal given that Glenview is allowed this week to start petitioning HMA stockholders.

All of HMA's board was re-elected in May by its shareholders. Lawson told a Star-Banner reporter that the vote was a reflection of the shareholders' faith in the board's "governance" of the company.

Trustee attorney Linda Fleming said she was going to include a provision in the lease agreement that would allow trustees to buy back the lease if HMA was taken over and ceased to exist.

HMA owns or leases 71 hospitals, of which 23 are in Florida.

Munroe consultant Eb LeMaster of Ponder & Company told trustees that the latest HMA events are a "reflection of all the consolidation in the industry. These kinds of stories are pervasive."

LeMaster said the reasons trustees selected HMA have not changed, the most important being HMA's strong Florida presence.

Trustees were given the opportunity to ask Lawson questions, but none did.

That news came after the announcement this summer that the U.S. Securities and Exchange Commission had launched an investigation into the health care giant and subpoenaed its billing and accounting data.

Before then, HMA revealed it was being investigated by the U.S. Justice Department, which is looking into the management of the company's emergency room operations and its computer software, Pro-Med.

Munroe is owned by the state-sanctioned Marion County Hospital District and is overseen by seven trustees who are appointed by the County Commission.

Munroe leadership says it needs an outside leasee to invest and keep the hospital competitive. It has for years relied on its investments, rather than patient revenue, to pay its bills.

HMA is offering $200 million to lease the hospital and another $150 million in master plan improvements. The trustees would oversee that $200 million. The lease could be completed by Nov. 1.

HMA will partner with UF Health Shands Hospital in the Munroe lease.

Trustee Joe Hanratty said the makeup of the HMA board ultimately will be "irrelevant" because the lease will dictate Munroe's future.

"Whoever acquires the company, acquires it subject to the terms of the lease," he said.

<p>Health Management Associates Inc. tried to quell any concern among Marion County Hospital District trustees Monday as the two sides work toward closing a $200 million lease deal allowing HMA to operate Munroe Regional Medical Center.</p><p>Pete Lawson, HMA executive vice president of development, said during a trustee meeting that an attempt by HMA shareholders to replace the company's board of directors has been well publicized and that "all other discussion is pure speculation."</p><p>Instead, Lawson focused on the lease discussions and insisted that those discussions were "on track."</p><p>"I think you made a great decision to pick us ... I think you should take comfort in that," Lawson told the trustees. "We're on time and in great shape. We're a Fortune 500 company and one of the strongest in the industry."</p><p>The reassurance came at a tumultuous time for HMA. The health care company's largest investor, Glenview Capital Management, is making a bid to oust HMA's current board and replace it with one Glenview said would be more focused on trying to increase the worth of the company and the interests of shareholders.</p><p>On a Glenview website, the company accuses HMA of grossly underperforming compared to peer health care companies, repeated failure to meet earnings goals, and growing revenue only by buying hospitals without thought to a logical, long-term growth plan.</p><p>New York-based Glenview complained that it had tried to work with HMA's board, but that it was ignored.</p><p>Glenview owns nearly 15 percent of HMA's stock.</p><p>Before the scheduled Hospital District trustee meeting, Lawson told the Star-Banner that regardless of the HMA board's future, the lease discussions were far enough along that he did not see them being derailed.</p><p>HMA has remained mostly quiet about the Glenview move, but Lawson said that HMA would likely soon become more vocal given that Glenview is allowed this week to start petitioning HMA stockholders.</p><p>All of HMA's board was re-elected in May by its shareholders. Lawson told a Star-Banner reporter that the vote was a reflection of the shareholders' faith in the board's "governance" of the company.</p><p>Trustee attorney Linda Fleming said she was going to include a provision in the lease agreement that would allow trustees to buy back the lease if HMA was taken over and ceased to exist.</p><p>HMA owns or leases 71 hospitals, of which 23 are in Florida.</p><p>Munroe consultant Eb LeMaster of Ponder & Company told trustees that the latest HMA events are a "reflection of all the consolidation in the industry. These kinds of stories are pervasive."</p><p>LeMaster said the reasons trustees selected HMA have not changed, the most important being HMA's strong Florida presence.</p><p>Trustees were given the opportunity to ask Lawson questions, but none did.</p><p>Reuters reported last week that multiple hospital chains are expressing interest in buying Naples-based HMA outright.</p><p>That news came after the announcement this summer that the U.S. Securities and Exchange Commission had launched an investigation into the health care giant and subpoenaed its billing and accounting data.</p><p>Before then, HMA revealed it was being investigated by the U.S. Justice Department, which is looking into the management of the company's emergency room operations and its computer software, Pro-Med.</p><p>Munroe is owned by the state-sanctioned Marion County Hospital District and is overseen by seven trustees who are appointed by the County Commission.</p><p>Munroe leadership says it needs an outside leasee to invest and keep the hospital competitive. It has for years relied on its investments, rather than patient revenue, to pay its bills.</p><p>HMA is offering $200 million to lease the hospital and another $150 million in master plan improvements. The trustees would oversee that $200 million. The lease could be completed by Nov. 1.</p><p>HMA will partner with UF Health Shands Hospital in the Munroe lease.</p><p>Trustee Joe Hanratty said the makeup of the HMA board ultimately will be "irrelevant" because the lease will dictate Munroe's future.</p><p>"Whoever acquires the company, acquires it subject to the terms of the lease," he said.</p><p>Contact Fred Hiers at 867-4157 or fred.hiers@starbanner.com.</p>